121 T.C. No. 8
UNITED STATES TAX COURT
FEDERAL HOME LOAN MORTGAGE CORPORATION, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 3941-99, 15626-99. Filed September 4, 2003.
P was chartered by an act of Congress in 1970 and
was originally exempt from Federal income taxation.
Pursuant to the Deficit Reduction Act of 1984 (DEFRA),
Pub. L. 98-369, sec. 177, 98 Stat. 709, P became
subject to Federal income taxation, effective Jan. 1,
1985. For its taxable years 1985 through 1990, P
claims entitlement to amortize intangibles using a fair
market value basis as of Jan. 1, 1985. P’s claim that
it is entitled to use fair market value as its adjusted
basis for amortization is based on the provisions of
DEFRA that specifically apply only to P. R determined
that P’s adjusted basis for amortizing any intangibles
is the regular adjusted cost basis of those assets as
of Jan. 1, 1985.
Held: Under sec. 167(g), I.R.C., the basis for
amortization of property is the adjusted basis provided
in sec. 1011, I.R.C., for the purpose of determining
gain on the sale or other disposition of property. The
adjusted basis provided in sec. 1011, I.R.C., is
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